On August 14, 2017 Judge Curtis E.A. Karnow of the Superior Court of California granted class certification in this monopolization law suit against Sutter Health, one of the largest hospital chains in Northern California with 27 hospitals.

Cohen Milstein is Co-Lead Counsel.

Case Background

On April 7, 2014, Cohen Milstein, on behalf of UFCW & Employers Benefit Trust (UBET), one of the largest union health plan benefits trusts in California, and other self-funded payers (or self-insured entities), filed an antitrust class action lawsuit against Sutter Health for violations of California’s Cartwright Act and Unfair Competition Law. 

Plaintiffs allege that a substantial portion of the high cost of healthcare in Northern California is directly attributable to the illegal, anticompetitive conduct of Sutter Health, and that Sutter Health’s illegal conduct has resulted in inflated prices that far exceed the prices its hospitals could charge in a free, competitive market.

Specifically, the plaintiffs allege that since 2002 Sutter Health used anticompetitive contract terms and contracting practices with its Network Vendors, the insurance entities that put together the health provider networks accessed by UBET members in California, to insulate itself from competition and raise prices. Sutter Health required its Network Vendors to, among other things, include all Sutter Health hospitals in a Health Plan’s Provider Network, even if there were more cost-effective hospital solutions in that geographic region.  Sutter further prohibited Network Providers from giving incentives to patients to utilize competing hospital services and from disclosing inflated hospital costs to patients. As a result, patients have no ability and little or no incentive to choose a high-quality competing hospital, based on price. In turn, Sutter Health’s competitors cannot effectively compete based on price, enabling Sutter to charge and maintain prices at levels that are significantly higher than prices charged in comparable competitive markets.

On October 27, 2015 a three judge panel in the First District Court of Appeal, San Francisco, California ruled that Sutter Health cannot require UBET to arbitrate the lawsuit, “pursuant to an agreement it had not signed or even seen.”

In April 2016, the Court denied Sutter’s Motion to Dismiss.

In August 14, 2017 the class was certified and the case is moving forward with fact discovery.

The case name is: UFCW & Employers Benefit Trust v. Sutter Health, et al., Case No. CSG 14-538451, Superior Court of the State of California, City and County of San Francisco.